Kerala High Court

S.Omana Amma vs State Of Kerala on 22 July, 2021

                                                                  [CR]

             IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                  PRESENT
           THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN
     THURSDAY, THE 22ND DAY OF JULY 2021 / 31ST ASHADHA, 1943
                      WP(C) NO. 12225 OF 2014
PETITIONER:

            S.OMANA AMMA
            W/O.LATE DAMODARAN NAIR, KOZHAPALLY VEEDU,
            PATTAZHI, PATHANAPURAM, KOLLAM.
            BY ADVS.
            SRI.O.V.MANIPRASAD
            SRI.SAJU J PANICKER

RESPONDENTS:

       1    STATE OF KERALA
            REPRESENTED BY ITS SECRETARY TO GOVERNMENT, EXCISE
            DEPARTMENT, GOVERNMENT SECRETARIAT,
            THIRUVANANTHAPURAM-695001.
       2    THE EXCISE COMMISSIONER,
            KERALA EXCISE DEPARTMENT, THIRUVANANTPAURAM-695
            001
       3    THE DEPUTY EXCISE COMMISSIONER
            KOLLAM-691001
       4    THE EXCISE INSPECTOR
            PATHANAPURAM EXCISE RANGE, PULANUR, KOLLAM-691 001


            SMT.SHEEJA.C.S., GP


       THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON    22.07.2021,   THE   COURT    ON   THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
 W.P.(C).No.12225/2014

                                   2


                                                              C.R.
                   P.V.KUNHIKRISHNAN, J.
                     -------------------------------
                   W.P.(C).No.12225 of 2014
             ----------------------------------------------
            Dated this the 22nd day of July, 2021


                             JUDGMENT

This writ petition is filed with following prayers:

i. To issue a writ of certiorari calling for records to Ext P8 notice and quash the same.

ii. To issue a writ of mandamus, order or direction to the 3rd respondent to release the entire balance amount in the treasury savings bank account TSA 10640 to the petitioner after adjusting Rs.1,10,000/- to the respondents.

ii(a). to issue a writ of certiorari quashing Ext P10 order.

iii. Such other relief this Hon'ble court deems fit and proper to grant in the facts and circumstances of the case.

2. Short facts for disposal of this writ petition are

narrated below:

Petitioner was the registered owner of vehicle Tempo W.P.(C).No.12225/2014

Trax bearing No.KL-02D/9143. The above vehicle was involved

in Crime No.78/99 of Excise Range Office, Pathanapuram and

the 4th respondent seized the vehicle in connection with the

above crime. Thereafter the vehicle was produced before the

confiscating authority. The petitioner approached the

authority for interim custody of the vehicle. The above

application for temporary custody of the vehicle was allowed

as per Ext.R3(a) order. As per Rule 4(2)(a) of the Kerala

Abkari (Disposal of Confiscated Articles) Rules, 1996 (for short

'the Rules') the vehicle was valued by the authorised officer

and the amount valued by the officer concerned was

Rs.1,25,000/-. Accordingly the petitioner deposited an amount

of Rs.1,25,000/- as security for temporary custody of the

vehicle. Ext.P1 is the details showing that the above market

value is deposited in the Treasury Savings Bank Account.

Accordingly the vehicle was obtained by the petitioner based

on Ext.R3(a) order.

3. The 3rd respondent, in the year 2006, had issued a

show cause notice to the petitioner in connection with the

confiscation proceedings. The petitioner submitted objection

and after hearing the petitioner, the 3 rd respondent W.P.(C).No.12225/2014

confiscated the vehicle as per order dated 26.03.2007.

Ext.R3(b) is the order of confiscation passed by the authority.

Thereafter the petitioner surrendered the vehicle before the

4th respondent on 01.08.2013 and a receipt was issued by the

4th respondent after surrendering the said vehicle for and on

behalf of the 3rd respondent. Ext.P5 is the receipt. Thereafter

the 3rd respondent issued a notice to the petitioner on

29.01.2014 informing her that she shall appear before the the

3rd respondent to receive the present market value of the

vehicle Rs.15,000/- within 7 days from the date of receipt of

the notice. Ext.P6 is the notice. The petitioner submitted

reply to the same, stating that the vehicle was temporarily

released after depositing Rs.1,25,000/- and the said amount

was deposited in the Treasury Savings Account in the year

1999 and the total amount in the said account comes to about

Rs.2,65,000/- as on that date. According to the petitioner,

respondents are entitled to get only an amount of

Rs.1,10,000/- and the balance amount in the account is to be

disbursed to the petitioner. In other words, according to the

petitioner, the petitioner is not only entitled for Rs.15,000/-,

which is the balance amount, but is also entitled to the W.P.(C).No.12225/2014

interest accrued on the amount deposited. Ext.P7 is the reply

submitted by the petitioner. The 3rd respondent thereafter

issued notice dated 28.03.2014 to the petitioner, stating that

the petitioner shall receive the present market value of the

vehicle and if not, the said amount will be forfeited. Ext.P8 is

the notice. As per Ext.P8, it is stated that the Excise

Commissioner took a decision that the petitioner is entitled for

only Rs.15,000/- and the rest of the amount shall be forfeited

to the government. The petitioner again submitted a reply to

the same, stating that the respondents are entitled to only an

amount of Rs.1,10,000/- and the balance amount is to be given

to the petitioner. Ext.P9 is the reply. Thereafter Ext.P10

order is passed by which the confiscating authority forfeited

the entire amount. Hence, aggrieved by the same, this writ

petition is filed.

4. Heard the counsel for the petitioner and the

Government Pleader.

5. The counsel for the petitioner submitted that in the

light of the specific provision in the Rules, the confiscating

authority is entitled only to the difference between the two

market values of the vehicle and it shall be adjusted from the W.P.(C).No.12225/2014

deposit already made. The counsel submitted that the

difference of the market value is Rs.1,10,000/-. The counsel

submitted that the balance amount with interest accrued as on

that date is to be disbursed to the petitioner. The counsel

submitted that the same is clear from the Rules.

6. The Government Pleader submitted that the

petitioner is entitled only an amount of Rs.15,000/-, which is

the balance amount. The Government Pleader submitted that

the interest portion need not be given to the petitioner. The

Government Pleader relied on Rule 4(2)(b) to support her

arguments. The Government Pleader also takes me through

Rule 4(2)(a) in which it is stated that the amount is deposited

in the Treasury Savings Account in favour of the

Commissioner of Excise. When the Rule is specific that the

petitioner is entitled only to the balance amount after

adjusting the difference in two market value from the balance

amount in the proper head of account, she is not entitled the

interest accrued as on that date. Therefore the Government

Pleader submitted that the prayers in the writ petition may not

be allowed. The Government Pleader also submitted that the

petitioner was directed to appear before the confiscating W.P.(C).No.12225/2014

authority to get the difference amount. But she refused to

appear before the authority. Consequently Ext.P10 order is

passed confiscating the entire amount. The Government

Pleader justified Ext.P10 order by submitting that such an

order is passed because the petitioner refused to appear

before the authority to accept even the admitted amount.

7. The short point to be decided is whether the

petitioner is entitled the interest amount that accrued to the

amount deposited in the Treasury Savings Account while

releasing the vehicle on temporary basis under Rule 4(2)(a).

For a better understanding of the case, it is better to extract

Rule 4 of the Rules:

"4. Carts, Vessels or other conveyances:-

(1)(a) When an authorized officer adjudging a confiscation of cart, vessel or other conveyance under Section 67E or 67F of the Act offers the owner of such property the option of paying in lieu of confiscation, a fine equivalent to the market value of the cart, vessel or other conveyance as fixed by the Mechanical Engineer of the Excise Department or any Mechanical Engineer of and above the rank of an Assistant Executive Engineer of the Public Works Department of the State, and if the owner of such property agrees to accept such W.P.(C).No.12225/2014

option, he shall be required to pay forthwith such sum as may already have been spent towards the safe custody and unkeep of such property, and to deposit such further sum as may appear likely to be required for such purposes until the payment of the fine.

(b) A period of fifteen days shall be allowed for the payment of such fine, if the fine is paid within such period, the property shall at once be, released to the owner together with such part of the sum so deposited as may remain unspent on such purposes, and if the fine is not paid within the said period of 15 days, the order of confiscation shall remain in full effect in the same way as if no option of the payment of a fine had been offered.

(d) An appeal may be preferred against the amount of such fine provided that the fine has already been paid.

(2)(a) The cart, vessel or other conveyance liable to be confiscated under the Act may be released temporarily by the authorized officer to its owner on depositing an amount equivalent to the market value of the cart, vessel or other conveyance, fixed by the Mechanical Engineer of the Excise Department or any Mechanical Engineer of and above the rank of an Assistant Executive Engineer W.P.(C).No.12225/2014

of the Public Works Department of the State in the Treasury Savings Account in favour of the Commissioner of Excise.

(b) The cart, vessel or other conveyance so released (temporarily) shall be produced before the Authorized Officer when final order of confiscation is passed by the Competent Authority and communicated to the owner of such property by Registered Post.

(3)(a) As and when the owner of the cart, vessel or other conveyance produces the same before the Authorised Officer, he shall reassess the market value of such cart, vessel or other conveyance in the like manner detailed in sub-rule(i).

(b) If the reassessed market value of the cart, vessel or other conveyance is found to be less than the original market value so fixed at the time of temporary release, the difference between the two market value of the same shall be adjusted from the deposit already made and credited to the proper head of account of the Excise Department and the balance amount due to the owner shall be released to him or in the case of death of the owner, to his legal heirs on production of necessary evidence in support of their claim as the case may be, within three months from the date of death of the owner.

Government.

Provided that the Authorised Officer concerned shall forfeit the entire deposit made under sub-rule (2) and seize the cart, vessel or other conveyance, as the case may be, if the owner fails to produce before the Authorised Officer the cart, vessel or other conveyance temporarily released to him, within 15 days from the date of communication to produce the same."

8. Rule 4(1)(a) says that when an authorised officer

adjudging a confiscation of cart, vessel or other conveyance

under section 67E or 67F of the Act offers the owner of such

property the option of paying in lieu of confiscation, a fine

equivalent to the market value of the cart, vessel or other

conveyance as fixed by the Mechanical Engineer of the Excise

Department or any Mechanical Engineer of and above the

rank of an Assistant Executive Engineer of the Public Works

Department of the State, and if the owner of such property

agrees to accept such option, he shall be required to pay

forthwith such sum as may already have been spent towards

the safe custody and unkeep of such property, and to deposit

such further sum as may appear likely to be required for such

purpose until the payment of the fine. Rule 4(2) (a) says about W.P.(C).No.12225/2014

the release of vehicle on temporary basis subject to the final

decision of the confiscation proceedings. As per Rule 4(2)(a),

the vehicle which is liable to be confiscated under the Act may

be released temporarily by the authorised officer to its owner

on depositing an amount equivalent to the market value of the

car, vessel or other conveyance, fixed by the Mechanical

Engineer of the Excise Department or any Mechanical

Engineer of and above the rank of an Assistant Executive

Engineer of the Public Works Department of the State in the

Treasury Savings Account in favour of the Commissioner of

Excise. Admittedly the vehicle was released to the petitioner

on temporary basis subject to the final decision in the

confiscation proceedings as per Rule 4(2)(a). The vehicle was

assessed by the statutory authority as per Rule 4(2)(a) and the

value was fixed as Rs.1,25,000/- as on that date. The amount

was deposited in the Treasury Savings Account as evident by

Ext.P1 pass book. The amount was deposited on 15.11.1999.

Ext.R3(a) is the proceedings by which the vehicle was

released on temporary basis in accordance to Rule 4(2)(a).

Subsequently, Ext.R3(b) confiscation order was passed by the

competent authority. After Ext.R3(b), the petitioner W.P.(C).No.12225/2014

surrendered the vehicle before the confiscating authority on

01.08.2013.

9. If the vehicle is surrendered, then the next step to

be followed is mentioned in Rule 4(3)(a). As per Rule 4(3)(a),

when the owner of the vehicle produced the same before the

authorised officer, he shall reassess the market value of such

vehicle in the like manner detailed in sub rule (1) of Rule 4.

Accordingly, the vehicle was again assessed by the statutory

authority as per Rule 4(1). The vehicle was valued and the

value was assessed as Rs.15,000/-. Thereafter the confiscating

authority issued notice to the petitioner to accept Rs.15,000/-

after adjusting Rs.1,10,000/- to the proper head of account of

the Excise Department. The contention of the petitioner is

that the petitioner is entitled this Rs.15,000/- along with

interest accrued for the entire amount deposited while getting

the vehicle for temporary custody under Rule 4(2)(a). For that

purpose we have to go through Rule 4(3)(b) once again. Rule

4(3)(b) says that if the reassessed market value of the vehicle

is found to be less than the original market value so fixed at

the time of temporary release, the difference between the two

market value of the same shall be adjusted from the deposit W.P.(C).No.12225/2014

already made and credited to the proper head of account of

the Excise Department and the balance amount due to the

owner shall be released to him or in the case of death of the

owner, to his legal heirs on production of necessary evidence

in support of their claim as the case may be. Admittedly the

confiscating authority offered the balance amount of

Rs.15,000/-. But, according to the petitioner, he is entitled to

the interest accrued for the entire amount deposited as per

Ext.R3(a) proceedings by which he obtained the interim

custody of the vehicle. I think there is some force in the

argument.

10. A vehicle is released under Rule 4(2)(a) temporarily

subject to the final decision in the confiscation proceedings.

The deposit mentioned in Rule 4(2)(a) is only to see that the

value of the vehicle is secured even if the vehicle is lost

subsequently. It is only a security amount. Once the vehicle is

produced as per Rule 4(3)(a), the department is only entitled

the difference of market value and the vehicle. The

confiscating authority is not entitled the interest accrued for

the amount deposited under Rule 4(2)(a). Rule 4(2)(a) is only

a temporary measure. The deposit of the amount is for the W.P.(C).No.12225/2014

purpose of the confiscating authority as a security and also for

the purpose of the petitioner. If the confiscating authority

finally found that the vehicle need not be confiscated, the

petitioner is entitled the entire amount with interest. But if

the confiscation order is passed, the authority can retain only

the difference of the market value and the vehicle. The

appropriation of the interest, according to me will be an unjust

enrichment by the State, which cannot be allowed. Therefore,

according to me, the petitioner is entitled the balance amount

of the difference between the two market value with the

interest accrued for the amount deposited as per Rule 4(2)(a).

The Government Pleader submitted that the petitioner was

using the vehicle till it was surrendered and therefore the

State is is entitled the interest portion. The Government

Pleader submitted that when it is produced, the vehicle is not

road worthy and therefore, the State is entitled interest. I

cannot agree with the same. As per the Rules, the

confiscating authority can confiscate only the value of the

vehicle and the vehicle itself. The Rule will not permit the

concerned authority to appropriate the interest accrued to the

amount deposited. Admittedly there is no specific rule W.P.(C).No.12225/2014

authorising the authority to appropriate the interest accrued

for the deposit as per Rule 4(2)(a). But I considered the

corresponding section in Tamil Nadu Prohibition Act, 1937.

Section 18-I of the Tamil Nadu Prohibition Act is extracted

hereunder:

"Section 18-I. Recovery of amount due to the State Government. --

(1) Notwithstanding anything contained in this Act or in any other law for the time being in force and without prejudice to any other mode of recovery which is being taken or may be taken, any amount due to the State Government under any of the provisions of this Act or the rules made thereunder along with interest, at such rate as may be specified by the State Government,--

(a) by deducting the amount due with interest from any money owing to the person which may be in the hands or under the control or disposal of any officer of the State Government; or

(b) by recovering the amount due with interest by attachment and sale of excisable articles belonging to the person from whom such amount is due.

(2) If the amount due to the State Government with W.P.(C).No.12225/2014

interest cannot be deducted or recovered in the manner provided for in sub-section (1) or the money so deducted or recovered is not sufficient to satisfy the amount and interest so due, the officer empowered may prepare a certificate signed by him specifying the amount with interest due or, as the case may be, the balance of the amount due from the person, and send it to the Collector of the district in which such person resides or carries on business and the Collector, on receipt of such certificate, shall recover the amount with interest specified therein as an arrear of land revenue from the said person.

(3) Notwithstanding anything contained in any law for the time being in force and subject to the prior claim, if any, of the State Government in respect of land revenue, any amount due to the State Government with interest shall be a first charge upon the property or interest in the property of the person from whom the amount is due."

11. From the above section, it is clear that the above

statute specifically authorise to deduct interest also from any

money owing to the person which may be in the hands or

under the control or disposal of any officer of the State

Government. Admittedly there is no such corresponding

provision in the Kerala Abkari Act or in the Rules. In such W.P.(C).No.12225/2014

circumstances, without the backing of a statute, the

respondents cannot retain the interest amount. It may amount

to unjust enrichment. The Apex Court in Sahakari Khand

Udyog Mandal Ltd. v. Commissioner of Central Excise &

Customs [2005 AIR SC 1518] it is observed thus:

"31. Stated simply, "unjust enrichment" means retention of a benefit by a person that is unjust or inequitable. "Unjust enrichment" occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else.

32. The doctrine of "unjust enrichment", therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of "unjust enrichment" arises where retention of a benefit is considered contrary to justice or against equity.

33. The juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or the doctrine of restitution."

12. In Renusagar Power Co. Ltd. v. General

Electric Co. [1994 AIR SC 860], it is held as follows:

"98. The principle of unjust enrichment proceeds on the basis that it would be unjust to allow one person to retain a benefit received at the expense W.P.(C).No.12225/2014

of another person. It provides the theoretical foundation for the law governing restitution. The principle has, however, its critics as well as its supporters. In the words of Loard Diplok: ".... there is no general doctrine of unjust enrichment in English law. What it does is to provide specific remedies in particular cases of what might be classed as unjust enrichment in a legal system that is based upon civil law."

13. In Indian Council For Enviro-Legal Action v.

Union of India and Others [2011 SCC 8161] it is held as

follows:

"151. Unjust enrichment has been defined as: "Unjust enrichment---A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense."

See Black's Law Dictionary, 8th Edn. (Bryan A. Garner) at p. 1573. A claim for unjust enrichment arises where there has been an "unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience."

152. "Unjust enrichment" has been defined by the court as the unjust retention of a benefit to the loss of another, or the retention of money or property of W.P.(C).No.12225/2014

another against the fundamental principles of justice or equity and good conscience. A person is enriched if he has received a benefit, and he is unjustly enriched if retention of the benefit would be unjust. Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another."

14. The Legal Maxim "Nemo Debet Locupletari ex

Aliena Jactura" means no one should be enriched by another's

loss. In this case, without any statutory backing, the

respondents have no authority to keep the interest accrued for

the amount deposited as per Rule 4(2)(a). In such

circumstances, the petitioner is entitled the interest accrued

along with the balance amount.

Therefore, this writ petition is allowed in the following

manner:

1. Exts.P8 and P10 are quashed.

2. The 3rd respondent is directed to release the

entire balance amount in the Treasury Savings

Bank Account TSA 10640 to the petitioner

after retaining the amount of Rs.1,10,000/- to

the respondents.

3. The above amount should be disbursed to the W.P.(C).No.12225/2014

petitioner, as expeditiously as possible, at any

rate, within two months from the date of

receipt of a copy of this judgment.

Sd/-

P.V.KUNHIKRISHNAN JV JUDGE W.P.(C).No.12225/2014

APPENDIX OF WP(C) 12225/2014

PETITIONER's EXHIBITS

EXT.P1.TRUE COPY OF THE TREASURY SAVINGS BANK DEPOSIT TSA 10640.

EXT.P2.TRUE COPY OF THE NOTICE DATED 14/11/2012 ISSUED BY THE 3RD RESPONDENT

EXT.P3.TRUE COPY OF THE NOTICE DATED 16/7/2013 ISSUED BY THE 3RD RESPONDENT

EXT.4.TRUE COPY OF THE REPLY DATED 26/7/2013 SUBMITTED BY THE PETITIONER